Adam, Klaus; Billi, Roberto - Center for Financial Studies - 2005
Optimal Policy, Occasionally Binding Constraint, Sequential Policy,
Markov Perfect Equilibrium, Liquidity Trap
* We would … commitment. Computational costs would thus be prohibitive.
23
When ignoring the lower bound, the optimal policy response to real … numerically solve for the fixed-point of (26) and the as-
sociated optimal policy functions y
k+1
, π
k+1
, i
k+1
, m
k+1
1
, m
k …